Natural Decision Systems, Inc.

The business failures of recent years have done nothing if not reinforce our understanding that some traditional auditing controls still in practice are woefully inadequate. Sampling as the foundation by which we form our opinion of the financial statements of a company are no longer enough. Fortunately, in this day and age of technology, we don't have to settle for such outmoded methods. Natural Decision Systems supports auditors and accounting professionals in the implementation of both "continuous auditing" and "continuous assurance" so that companies and their investors can have a high degree of confidence in the final issued opinions.

The rudimentaries of continuous assurance and continuous auditing are the same. Natural Decision Systems builds a bridge to the client's accounting system and at predetermined time intervals, downloads selected files and tables. For example, if we were to support the determination of the existence and accuracy of receivables and the sufficiency of the reserve, we would do the following:

Continuous Auditing

Evaluation of Notes Receivable to Determine the Existence and Accuracy of Receivables and Sufficiency of Reserve

Connect to Client Accounting System

Download Tables

• Invoice
• Product
• Interest Rate

Analytical Evaluation of Notes Receivable by Continuous Auditing System

1. Prepare data for analysis
2. Select audit period
3. Verify all notes are accounted for
4. Independently calculate notes receivable based on the above tables. (Performance of each note over the life of the note.)
5. Independently calculate the note balance. (Performance of each note at the end of reporting period.)
6. Compare the independently calculated values to the Cass stated values.
7. Categorize notes from both Cass and continuous audit analysis according to type: balloon, uncured, regular and deposits then aging analysis:
   1. prepaids
   2. current
   3. 1 – 3 payments late
   4. 4 + payments late
8. Prove results
9. REPORT ANOMALIES

Based on Results from the Continuous Auditing System:

1.  Review anomalies –auditing professional must apply both industry and specific client knowledge.
2. Using probability algorithms, select anomalies and samples for verification.
3. Trace selections to source.
4. Determine the existence and accuracy of receivables and the sufficiency of reserve.

For more information about our services, please write to info@continuousassurance.com or call 972.470.9138.